News on climate change has been grim over the past year. In 2017, carbon dioxide levels were the highest they have been in 3-5 million years. According to NASA, 2017 was the second-hottest year globally since 1880. And this is not a one-off: eighteen of the 19 warmest years on record have happened since 2000. The Arctic is warming twice as fast as anywhere else on earth in 2017 and sea levels are rising at the fastest recorded rate in 2,000 years. According to the latest report from the Intergovernmental Panel on Climate Change, the window to limit global warming to a below 2 ° pathway is fast closing. Moreover, not only are the consequences of a two-degree world far greater than that of a 1.5° world, but we are not on track for either.
In 2017 alone disasters triggered by weather - and climate-related hazards cost the global economy US$320 billion in losses. In future these economic losses will increase and will have a bigger impact on the lives and livelihoods of the poorest and most vulnerable. By 2030, climate impacts could push an additional 100 million people into poverty by 2030, unravelling development gains to date. By 2050, as many as 143 million people could become climate migrants in just three regions (Sub-Saharan Africa, South Asia and Latin America), with individuals, families and even whole communities forced to seek more viable and less vulnerable places to live.
Climate Action Could Unlock Major Economic Opportunities
Despite the grim headlines, there is cause for optimism with clear evidence of the economic momentum driving finance and markets towards low-carbon opportunities, and the cost of renewables and batteries falling. The economic case for climate smart development is now clearer.
The New Climate Economy report noted, for instance, that with the potential to unlock $26 trillion and 67 million jobs up to 2030 while also delivering reduced congestion, cleaner air, new jobs and market opportunities.
The World Bank Group is playing a leading role in climate action, delivering a record-breaking $20.5 billion in direct financing for climate action in 2018, doubling delivery from the year before the Paris Agreement and meeting its 2020 targets two years ahead of schedule. This result is part of an institution-wide effort to mainstream climate considerations into all development projects as outlined in the Bank Group’s Climate Change Action Plan. In addition, the number of World Bank projects that deliver some level of climate co-benefits almost doubled, moving up from 37 percent in 2016 to 70 percent in 2018. Over the last two years, our financing has driven strong results, including:
- Generating or integrating 18 gigawatts of additional renewable energy into electricity grids; and mobilizing over $10 billion in commercial finance for clean energy;
- Developing 22 investment plans for climate-smart agriculture in 20 countries;
- Providing 38 million people in 18 countries with access to reliable climate information and early warning systems to deal with more frequent and intense natural disasters such as floods and hurricanes.
There is also some movement in carbon markets. National and subnational carbon pricing efforts, which could offer the clearest signal of the low-carbon transition to market participants, have tripled in the last decade. As of September 2018, 46 national jurisdictions and 25 subnational jurisdictions are putting a price on carbon. In November 2018, the world’s first official chapter of the Carbon Pricing Leadership Coalition was launched in Singapore, reflecting growing momentum for carbon pricing in Asia.
Globally, in 2018, the green bond issuance expected to reach $250 billion. In November 2018, the World Bank Group marked the ten year anniversary of green bonds with landmark issuance bringing the total $12.6 billion. Over those ten years, the World Bank Group has helped create this market including by defining criteria for eligible green bond projects and being the first to provide investors with assurances. The Bank has helped developing countries to issue green bonds, for example in Fiji in 2018, and IFC has helped corporations to develop this market in developing countries. In October 2018, the World Bank also launched the world’s first blue bonds, aiming to help Seychelles transition to a sustainable use of marine resources.
There’s Good News and Bad News: So What Comes Next?
Three years on from the signing of the Paris Agreement, representatives of over 200 countries will gather in Katowice, Poland, to kick-start the 24th Session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP24). The priority of the negotiations is agreement on the “Paris Rulebook” or the implementing guidelines of the Paris Agreement, effectively the framework of rules and operating procedures that will underpin the Agreement. The World Bank delegation will be participating in over 60 events, announcements and launches.
The World Bank Group’s engagement at COP will be centered around these core messages: first, we cannot fight poverty without fighting climate change, including scaling up attention to adaptation; second, ; third, that the World Bank Group is committed to extending its already significant leadership role on climate. As part of our endeavor to be more ambitious on climate, we will announce new 2025 targets through which, even as we continue a strong push on mitigation efforts, we will scale up our efforts on adaptation.
Our announcements recognize the urgency of climate action and the significant role of the World Bank Group to help our clients avoid the mounting risks of a changing climate and unlock the economic opportunities of cleaner, climate smart growth.